Hi
Thanks for replies.
It's a residential property.
I submitted my quote for works (approx £18k)
I don't claim VAT back for anything I buy as I'm not vat registered.
So when I calculate my costs for materials it is based upon what I would pay for them.
But now the insurance company have come back and said there not going to pay the VAT and saying they going to deduct £5k?!?
I suppose I can kind of see their point. You bought from a VAT registered supplier who withheld VAT. Then you are effectively "selling" to the insurance company who is also VAT registered but now they can't reclaim the VAT as they normally would because you are not VAT registered so they are out of pocket.
Two solutions I can think of: a) tell insurance company to buy supplies themselves directly (unlikely I presume). b) register yourself for VAT.
Of course the labour doesn't have any VAT component so you can just tell them the VAT is zero on the labour so no problem to withhold there.
This is all wrong.
-Why would you assume an insurance company, in the business of supplying vat-exempt services, registered for VAT?
-Why would a seller withhold VAT? Who is paying who?
I just can't think of any other reason for them to refuse to pay the VAT component. Is there another reason?
Actually, if the insurance company has a VAT exemption then a VAT registered seller can sell them goods exclusive of VAT. Maybe that's why?
Are you making up VAT-law as you go along? (Plain wrong)
Hi Joe
I think in this case, the leak was to the builder's own property and he submitted a claim based upon potential costs to him for getting necessary repair materials - these were for EUR12k net + EUR5k Vat = EUR17k.
Insurance company assumes he's VAT registered - he confirms he's not in this thread - and seek to only pay him the Net. Ie he would be at a loss and would find it difficult from his first VAT3 to seek a refund ? Added to which he would have to charge VAT from now on ?
I have a small building company and we are not VAT registered.
I recently started a small job and found a leak which turned into a large insurance claim.
I was asked to quote for the works and the client also obtained 2 other quotes.
Wrong because? VAT exempt companies should pay VAT anyway? Really?
However if an insurance company receives a claim from a VAT-registered business* it will pay out Net of Vat ... reasoning being that the company receiving the Net will pay that to the Builder adding on an amount for the VAT chargeable by the builder/repairer but can then claim back that VAT in its next VAT return.
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